Should we, average Joe the Plumber Americans, trust that when we pay our insurance policy premiums that the money is being used wisely and that, God forbid we should ever have to file a claim, the funds will be available from which to pay. Here are some questions we need to ask.

Do you know what your insurance company is doing with your premiums?  Do they invest in risky mortgage deals?  Many do.  With the giant insurance company, AIG, on the brink of failure last month, and the massive subsequent $85 billion government bail-out to save their tail, concern is foremost on the minds of many who own insurance policies, not only with AIG, but with other insurers as well.  The new CEO of AIG recently announced that the company will sell off some of its subsidiaries to try and repay the huge loan over the next 2 years.  But some financial advisors are skeptical that the income generated from those sales will be enough to pay off all the debt.

With such dire news, many people owning an AIG life or health policy have begun replacing their policies with a plan from another insurance company that they feel is more stable.  The problem is, when people start mass-surrendering policies, it only adds fuel to the fire and worsens the overall financial picture of the insurer, and ultimately, the economy.  The less premium money the insurer has to work with, the less money it has to pay out in claims, and the greater the risk of financial instability. What many may not realize is that AIG’s insurance subsidiaries are actually considered safe and sound . . . it was the financial mortgage-backed securities that got them in trouble.  Your insurance policy is actually insured by the government to protect you in the case of the financial collapse of the insurance company (up to certain limits, which are pretty high).  If you own an AIG life or health policy, don’t be too hasty to rush out and replace it. 

That fast talking agent who is trying to convince you to replace the policy with one from a different insurer may not have your best interests in mind.  He or she may just be looking at a first year commission rate.  It happens all the time, so be careful. Some insurance agents out there will try to “sell” you on the fact that a certain insurance company is “A” rated by one of the rating agencies, such as “Standard and Poors” or “A.M. Best”.  The fact is, while insurers who consistently receive a high rating generally are the safest ones to purchase coverage from, it has not been unknown for an “A” rated company to suffer a catastrophic loss and suddenly become insolvent and need assistance.  This happened several years ago with a prominent life insurance carrier based out of Lexington, Kentucky.  The carrier was going strong and had an excellent “A+” rating for years, when news broke suddenly that the insurance company was filing for protection.  It seems it had unwisely invested in a high amount of “junk” bonds.  When the majority of these turned sour, it was enough to list the ship and it began to sink.  Another well-known insurer stepped in to purchase the block of business and few policyholders were affected by the demise, but it was enough to scare many people into surrendering their policies in the meantime.  They ended up changing companies and often paid higher premiums (due to their advanced attained age and possibly declining health), while they could have stayed put and saved money and still had a quality life policy, protected by the new company that took over.

Contrast that information with the latest news about Allstate which informs us that there will be a shortfall, but it will be because of acceptable reasons – losses from storms damage from hurricanes and other smaller storms. These are expected – not the losses which come from poor investment and money management policies.

The moral of this story is to look before you leap – don’t panic and make hasty, rash decisions that could, in the end, have an adverse effect on not only you, but the economy as well.

Jennie Segurado – A lifelong insurance professional

                                        in South Carolina

Reach Jennie at:      JennieSegurado@Insurance.sc

Most of us get phone solicitations from companies trying to sell a product which, even though they won’t call it by its’ real name, is credit card insurance, a product which can help save your credit in troubled economic times. In these financially challenged times, everyone is looking for more ways to save money.  Studies have shown that more and more of us are car pooling, brown-bagging our lunch to work, cutting coupons, shopping at second-hand clothing stores . . . almost anything to help stop the financial bleeding. 

One of the ways in which you may cut costs might be found in your wallet right now.  Do you carry credit card insurance on your card or cards?  Did you read the fine print before you made the purchase?  Some people may be paying for this insurance on their cards (especially those who enrolled online or over the phone), without even knowing it.  Depending on how many cards you have, or what your balance is, those fees can add up over the year!

Credit card insurance pays the minimum monthly payment on your credit card if you are out of work due to a disability or illness, and also will pay off the balance in the event of your death.  But, what a lot of people fail to take notice of are those three important words:  minimum monthly payment!  Most credit card insurance companies only pay the monthly minimum amount due on your balance, if you happen to be out of work due to illness or injury and cannot make your payments.  In the meantime, however, interest charges still accrue on your balance.  In essence, due to the interest charges still being applied, your balance will not go down much. . . you are basically just “maintaining” the account, like it’s on hold until you are actively back at work.  And, most people find that the cost of the insurance – from .50 ¢ up per $100 of loan coverage – resulting in fees of $20-$35 on average per month, is not worth the benefit received.

Putting it into perspective, credit card insurance is basically equivalent to a late fee and you still have to pay the interest and principal. So what is the benefit? The only real benefit is that you don’t get slammed with a bad credit rating for not paying your bill if you are unable to work. That being said, the balance will keep growing until either a) you pay it or b) the account reaches its’ limit. At that time you will be forced to deal with it.

Who buys credit insurance?  Typically, people on limited incomes will opt to buy this insurance coverage.  They tend to have higher balances (as some use credit cards as a regular way of monthly spending), and have little to no discretionary income with which to pay their minimum amount due on their credit card should they become ill or injured.  For this market segment, credit card insurance may make sense.

For those with a middle-to-higher income base, however, it’s probably wiser to pay down the debt and set aside funds for emergencies such as losing your job or becoming disabled.  Paying down debt is a lot easier said than done, I know.  Try to be creative!  Have a garage or yard sale or get a part-time job to help supplement your income until the credit card debt is reduced.

So, take a few minutes to dig out all your credit card files.  Find out on which cards, if any, you are paying for credit card insurance – and then make an informed decision as to whether it is really necessary to continue the coverage.  By law, you can cancel the coverage at any time, so don’t think you are contractually bound to keep it in force.  Take action today!

Jennie Segurado is a lifelong insurance professional.

 Reach Jennie at:       JennieSegurado@Insurance.sc

One thing that most consider a necessary evil is insurance. In most places, you must have this on your home (if you are the owner) and you must also have it on your vehicles when you want to drive in South Carolina. You should also have it if you rent, as your landlord’s insurance does not cover your personal belongings. Life insurance is also something that all people should have no matter how routine or dangerous their jobs may be. This helps protect families in the event of misfortune. What is just as important as having insurance is understanding your insurance rates.

When it comes to car insurance in South Carolina, for example, your insurance rates are going to depend on many things. One aspect is your driving history, and that does play a vital role in determining how much you are going to pay for even cheap insurance quotes in South Carolina. If you have had accidents and speeding tickets, your insurance rates are going to be higher. You can slowly work them down over the course of a few years if you uphold a good driving record, but if you don’t, your rates will stay high. You may also find your car insurance rates change depending on how old you are, how long you have been driving, and where you park your car at night.

When it comes to homeowners insurance, your home insurance rates depend on what type of coverage you must have. This differs depending on your mortgage details. You may need to have fire, and you may also want to opt for flood insurance. Your home insurance rates in relation to your home will also have a lot to do with where you live and what possible things could happen. Those near the coast, for example, are going to have higher rates when it comes to flood insurance.

As for life insurance rates, you are going to find that your job will decide how much you have to pay for the coverage that you need. When you have a job like pilot, construction worker, or anything else that has a suggestion of danger involved, your life insurance rates are not going to be kind to you. However, there often isn’t much you can do about that. You can look around for the best deal, and that is something a wise consumer does, but you may find most life insurance rates near the same as the others. You just have to weigh their worth in comparison for what you are getting in return.

Crop Insurance is an example of the wide variety of different types of things, products, people and events for which today’s insurance industry can write a policy.

Crop insurance for the South Carolina Farmer can be a Godsend.  Think about this opening line from the popular nursery rhyme “Little Boy Blue, come blow your horn; the sheep’s in the meadow, the cow’s in the corn.”  It conjures up images of an errant, sleepy farmer boy, asleep on a pile of hay, while the sheep run amuck in the meadow and the cows are gobbling up valuable corn crop.  While this may bring a smile to the faces of many, it wouldn’t be as funny to the real life farmer whose very livelihood depends on these crops to pay his family’s bills and expenses.

Today, prudent farmers, agricultural producers, ranchers and others purchase a form of protection known as crop insurance.  While I’m not sure that cows eating the corn would be a covered expense (though it might!), crop insurance protects them against the loss of their crops due to natural disasters, such as hail, floods and droughts.  Additionally, if the price of agricultural commodities declines, they are protected against the resulting loss of revenue.  Ultimately, coverage can be purchased for two types of crop insurance:  crop-yield and crop-revenue insurance.

Crop-yield insurance has been around for a long time, dating back to the early 1800s.  The earliest form of this coverage was called crop-hail coverage, protecting farmers from loss of crops due to hailstorms. But the coverage was limited to hail-related damage.  Most recently, the advent of Multi-peril crop insurance (MPCI) covers a more broad spectrum of perils, including insects (nope, cows are not insects), disease, and others.

Crop-revenue insurance is based on crop yield guarantees, based on the individual farmer’s past production records.  In essence, if the farmer’s yield is less than the cash settlement price and guaranteed production amount listed in the policy, the policy pays an indemnity amount.  The crop-revenue portion of the policy covers the decline in price that may occur during a crop’s growing season, but not from one season to another.

Don’t get caught under a haystack – if you’re in the agricultural field, this may well be a wise and necessary investment to protect your assets!

Jennie Segurado is a lifelong insurance professional.

 Reach Jennie at:

JennieSegurado@Insurance.sc

It happens once a year . . . Health Insurance open season, when we choose our  health care providers and everyone wants low costs and high benefits

and is a time of great frustration and some stress for most group insurance administrators of employers everywhere – the dreaded annual group health insurance renewal fiasco. I am going to let you in on behind the scenes dealings that directly influence your insurance policy. Hopefully, this will help you see what you get and part of why. I also want you to see what the people who represent you and your company go through to get you the best, most reasonable coverage possible.

More often that not, the current carrier sends a notice about 60 days in advance of the group’s renewal date, bearing the grim news that rates are once again being raised for the group plan due to trend, demographics, and claims experience over the past year.  The renewal rates are usually high enough to send the group administrator into a tail spin, and frantically he or she turns to the agent that sold them the policy for assistance.  The agent generally has two choices:  try to appeal and get the current carrier to lower their renewal rate percentage, or shop the account with other insurance companies to get a lower rate.  The latter seems to be the way that most end up, and this means a lot of legwork. 

The group admin must gather all sorts of information, such as providing the agent with a current, up-to-date census, current benefit plan design(s), current and renewal rates, and if the group is large enough, claims experience and loss ratio reports.  Once the agent is armed with all of this data, he can then shop the account to get better rates without sacrificing benefits.  This can be very difficult and time-consuming.

However, if the group chooses to stay with the insurance company that is currently in force, the usual method of lowering renewal rates has been to decrease benefits. This is done by raising the co-pay amounts, deductibles, and out-of-pocket maximums, or by lowering the coinsurance level to 70% or 60% rather than the usual 80%.  The group ends up with lower rates, but sacrifices benefit. 

An alternative to this never-ending cycle would be for the group to purchase a qualified High-Deductible Health Plan (HDHP). These plans have been gaining in popularity in the past few years, giving employees 100% coverage for medical and prescription drug expenses after an aggregate (total family) deductible has been met, while often including a preventive care first dollar benefit (for annual physicals and immunizations, etc.). Further, the insured have the opportunity of opening a Health Savings Account (HSA) associated with their high-deductible plan, which offers them valuable tax savings.  Employees should ask their CPA for advice concerning HSA plans.

Taking it a step further, employers can institute a Health Reimbursement Arrangement (HRA), to work with the HDHP plan, whereby the employer reimburses each employee a certain dollar amount of claims per year (such as $1,000 for single employees and $2,500 for families), reducing the employees’ total out of pocket exposure per year.   Everyone comes out ahead when these innovative money-saving ideas are implemented in a group health plan.

With the economy in the poor state it’s in, HSA and HRA plans just may be the shot in the arm that the health insurance industry needs . . . and it seems to be working!

Jennie Segurado

A Lifelong Insurance Professional

Reach Jennie at:    JennieSegurado@Insurance.sc 

Let’s talk about how you can get the best deal on Automobile / Car insurance in South Carolina.

Last week, my sister opened her mail and got a nasty surprise. Her car insurance renewal had arrived and the rates for the coming year had almost doubled! She was confused and angry because she had an excellent driving record, and did not understand why her premium had taken such a steep incline. She called the insurance company and was told that she had not been singled out for a rate increase, but that it was an across-the-board increase for all policyholders due to “trend”.

What is trend? Trend is made up of several factors, including the number of drivers in a given geographical area that are young, male and unmarried . . . how many are either under or non-insured . . . and what the insurer’s claims experience had been like for the past year.

She and other policyholders were victims of the “trend” monster. My sister had only one option – to face the grueling task of shopping around for cheaper insurance. And if you’ve done that before, you know it’s not a pleasant thing to do. You spend lots of time either online or on the phone, getting quotes, and trying to compare “apples to apples”, but end up just getting more and more confused.

Plus, most of the carriers these days will ask for your Social Security number to run your credit because bad credit scores, according to the car insurance industry experts, have a direct correlation to bad drivers. Or, so they say. I don’t know about you, but I personally know many people who have excellent credit who can’t drive worth a darn, and vice versa. But running your credit a lot can decrease your credit score, so be careful.

One savvy way to shop for car insurance is to skip the well-known, nationally recognized names and instead, call a local brokerage agency that will do the shopping and comparisons for you. They will often come up with an insurance carrier that can provide a good, basic policy at an affordable cost. They may offer discounts to help lower your premium even further such as “driver education” credits or even a credit if you are a supervisor at work or in a managerial position. Of course, it’s always wise to do a little homework on the carrier that looks the best on paper. How long have they been in business? Are they new to your area? If so, they could very well be “buying” the business and don’t have the experience or history to know exactly what type of claims they can expect to pay out. If they have a bad first year or two, they could hit you with a whopping increase at renewal time, and you’ll find yourself back to square one. But that’s not always the case, and it’s definitely worth your time to look into a brokerage agency.

And if you find a good company that deals out only marginal increases each year or two, you may want to stick with them. Most carriers offer loyalty discounts to their customers and, even with small increases, you’ll likely be paying less than a new customer coming on board! Good luck . . .and drive safely!

Jennie Segurado

A lifelong insurance professional. Reach Jennie at: JennieSegurado@Insurance.sc

The reason for these thoughts I am writing is that I see too many people who fail to file their insurance claims on time and, because of their tardiness, they end up paying bills out of their own pockets that should rightfully have been paid by their insurance company. Having to stay a half hour after school for being tardy to class was agravating. Having to pay $12,000 out of pocket because you don’t file a claim on time is rediculously wasteful.

You see, I work for a health insurance agency, and part of my duties involve helping clients get their claims filed to the insurance company and collecting reimbursement. 

Recently, I had one elderly gentleman come in to the office.  He explained that he had undergone hip replacement surgery and gingerly made his way down the hall to my office.  I felt bad for the poor guy, as he laboriously lowered himself into the chair across from my desk. 

Reaching into a somewhat large tote bag that he had brought with him, he proceeded to pull out a mountainous stack of medical bills, receipts, and EOB’s (Explanation of Benefits) forms.  My task was to sort through the paperwork to determine which, if any, of the bills and charges had not been processed by the insurance company, and to advise him of any charges for which he was responsible to pay.  He had recently lost his wife, who had always handled the couple’s insurance paperwork and he was feeling a bit overwhelmed, and needed my assistance.

Since it would have taken quite a while to sort through the enormous stack of paperwork, I sent him back home and assured him that I would call him when I had prepared an analysis of his claims.

Unfortunately, the call that I had to make to him later that day was not bearing the best of news.  Approximately 40% of the expenses for which he had provided me paperwork, were for dates of service fourteen to fifteen months in the past.  His insurance carrier’s policy on submitting proof of claims specified that claims must be submitted within 12 months of the date of service.  Because this gentleman had waited longer than the 12 months required of his policy to submit his claims, 40% of them would be declined by the insurance company, leaving him with a huge amount of out of pocket expenses.

Fortunately for this gentleman, the agency I work with has a solid and privileged relationship with the major insurance carrier in question, and I was able to convince them to process and pay on the majority of the outstanding claims.  This was, in part, because the gentleman’s delay in filing the claims was caused by his wife’s extended illness and subsequent death, and his having to devote almost his time and attention to the matter.

 But this will not usually be the case. Because of our longstanding relationship and very good reputation we were extended a professional courtesy. With this in mind it is important for you to consider the reputation and even the longevity of the company with whom you are considering doing business.

 In the meantime just try to make sure you file your claims to your insurance carrier within their specified period of time. If your doctor or hospital automatically files them for you, you do not have to concern yourself with this chore. It is important to pay attention to the time limits because they vary by carrier. Be sure to check with them or your agent if you are unsure. 

Don’t get stuck with un-necessary bills to pay when all you have to do is be on time!

Jennie Segurado

A lifelong insurance professional.  Reach Jennie at:    JennieSegurado@Insurance.sc 

Accidental Death and Dismemberment Insurance (AD&D) . . . is it really worth the money and do you really need it?  That’s a decision that everyone needs to make on their own.

You may have received offers of this type of coverage in the mail, along with your credit card or mortgage statements, and have wondered, “Should I buy this type of coverage?”

While AD&D coverage is relatively inexpensive, the majority of people decide to put the money they’d be paying towards the premium into an ordinary or standard life insurance policy.  By adding AD&D as a rider to a life policy, it basically doubles the benefit amount if death is caused by an accident. And, if you already have health insurance, dismemberment will normally be covered as part of your policy, making purchasing a separate AD&D policy unnecessary.

It’s important to keep in mind that, with AD&D coverage, if you die by any other means except by accident, such as from complications of surgery or a drug overdose, the loss would not be covered and your beneficiaries would receive nothing.  Additionally, most AD&D contracts include a stipulation that the death must occur within a certain limited time frame following the related accident, or no benefits will be paid out.  On the dismemberment portion of the coverage, if you lose just one arm, one leg, or the loss of sight in only one eye, you will not receive the full benefit, but only a percentage, such as 50% or 60% of the full benefit.  Only by losing two members or the loss of sight in both eyes, would you receive the full benefit of your policy.

Do you really need AD&D?  Sure - if you actively skydive, bungee jump or participate in other hazardous hobbies or activities, the chances are increased that you may actually die in an accident rather than natural causes, and in those cases, AD&D insurance might make sense.  But be prepared to pay a higher premium if you do!  The insurance company’s actuaries will figure into the policy the cost of the elevated risk, and you will pay more.  Some hobbies or avocations, as they are called, may even be excluded from coverage.

It’s true that premiums on AD&D plans are pretty cheap, but keeping in mind all the limitations of this kind of policy, and the potential to duplicate coverage you already have in your life and/or health policy. If you still feel it may benefit you and want the extra security the insurance would provide, go for it.

Jennie

Jennie Segurado

A lifelong insurance professional. Reach Jennie at:    JennieSegurado@Insurances.sc 

Renter’s Insurance is available for those who are renting a place to live need protection against loss of their personal belongings from things like fire, flood, hurricanes and other unforeseen disasters.

So, how much do you like your 60” HDTV?  Or the coin collection that Dad handed down to you before he passed away?  Or how about those twin kayaks sitting out in the garage?

If you are renting, and think you don’t need renter’s insurance – or can’t afford it – think again.  Generally, renter’s insurance is relatively inexpensive, ranging from $10-$25 per month.  Is that worth peace of mind to you?  It is to most people.  And, while you may not think you have a lot of belongings and that the total cash value wouldn’t even be enough to bother with, consider this:  the fact is that studies have shown that most people own at last $20,000 worth of personal property in their homes!  Some own much more. 

A few years ago, our apartment was broken into four days before Christmas.  The thief took all of our wrapped Christmas gifts, totaling in value over $2,500.  Fortunately, our renter’s insurance paid us replacement value for every item. Luckily, since they were Christmas gifts, we had kept all the receipts!  Be sure to take pictures of all your belongings of value, and keep any sales receipts in a safe place. And, it’s wise to record serial numbers and other identifying information of electronic equipment, bikes, etc.

Usually, renter’s insurance coverage is provided whether the loss is from theft or from a natural hazard, such as fire, flood or earthquake disasters.

Also, consider that renter’s insurance not only covers your belongings from theft or natural hazards, it can also extend to while you are away from home, such as on vacation.  If your suitcase is stolen, you will most likely be covered.  Also, your policy may cover you if items are stolen from your car.  Renter’s insurance can even cover you for liability for personal injury – if you are prone to picking fights or if Cousin Eddie falls off your porch at your party, after having one too many Fuzzy Navels! Ask your insurance professional for specifics.

Renter’s insurance – it just makes good sense.  If you’re renting, be sure to talk to your insurance agent today!

Dennis R Bailey is a lifelong Insurance Professional

Reach Dennis at:    DR_Bailey@Insurance.sc

There are a bunch of car insurance companies in South Carolina. How do pick the right one? Here are some tips:

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